The result of TV’s irrelevancy is that marketers have turned to social media in order to target this sought-after demographic. And one powerful way of reaching people in this age group is through influencer marketing.

Companies hope that fans will buy the products based on their admiration of those influencers. People who qualifiy as “influencers” can include those who are extremely famous or only moderately well-known.

One high-profile example is DJ Khaled, who has over six million followers on Instagram. Another is YouTube star PewDiePie, who has over 55.7 million subscribers.

But, surprisingly, the most impactful influencers are “micro-influencers.” These are people who have less than 100,000 followers, and sometimes only thousands.

FTC Crackdown

While a lucrative industry, influencer marketing has turned into sticky territory. It is the job of the Federal Trade Commission (FTC) to enforce fair business practices.

Recently the agency has gotten tougher on influencers whom it believes have not fairly disclosed the fact they are selling something.

A recent study by Mediakix found that about 93% of celebrity endorsements on Instagram violate the FTC’s guidelines.

Such violations can be costly. Sony, Xbox, and Warner Bros. are all brands that have settled high profile cases with the FTC for failing to adequately disclose the fact they were advertising.

In April of 2017, the FTC sent 90 warnings to various brands and influencers, reiterating its disclosure regulations.

The FTC’s stipulations include that abbreviated hashtags for #sponsored, such as #sp or #spon, are not sufficient. It is also important that hashtags revealing that a post is advertorial are not buried at the bottom of a list of other hashtags.

The FTC wants hashtags such as #ad or #sponsored displayed prominently. It also wants wording that makes it clear that a brand has paid for a post, as opposed to a generic thank you to the brand.

It’s Complicated

You might think it’s fairly obvious that users should know whether or not the content they’re viewing is selling something. We all want to know that people are genuinely recommending something because of its value. If money alone is motivating them, why should we listen?

But the issue is a little more complicated than you might think. Some point out that a celebrity posting content featuring a brand is not really different from the product placement that is common in a movie or TV show.

A movie isn’t an advertisement, i.e., a commerical. But everyone knows that those products are only in the movie because brands paid for them to be there.

In the same way, if Selena Gomez were to post about her favorite hair product, most people will assume that she’s selling that product because she’s so famous.

Those coming from this point of view also argue that influencers would only choose a brand they genuinely like anyway. So what’s the big deal?

Is the Situation Fair?

Another point to consider is that it’s very difficult to enforce penalties impartially. What if a micro-influencer is paid to post about her favorite hair product and does not disclose that someone paid her to do so?

It will not be obvious to users whether or not someone did in fact pay her. She’s not as famous as Selena Gomez.

It’s easy for the FTC to find and warn rule violators like Jennifer Lopez and Kourtney Kardashian. But micro-influencers can be guilty of the same failure to disclose while easily flying under the radar.

Just because the FTC is trying to make an example out of the “major offenders” does not mean it will be able to enforce its policies fairly.

To further complicate the issue, there are people online who are posing as influencers. They use the hashtags #ad or #sponsored to create the illusion brands are paying them, when no one actually is.

The obvious attraction in this move is for the fakers to make themselves seem more renowned online than they actually are.

Good Solution to the Influencer Marketing Problem?

In light of the difficulty of fairly enforcing FTC regulations, Chuck Moran of Marketing Land argues that the answer is for “industry participants to come up with clear, implementable standards for disclosure.”

He cites OBA AdChoices and the Children’s Advertising Review Unit as examples influencer marketers could follow.

He believes that “It’s in everyone’s interest at this point — the brands, the influencers, the platforms and the consumers themselves — to arrive at a clear methodology for adhering to emerging standards for disclosure across all of the major influencer platforms.”

Moran argues that the FTC’s enforcement is proof of the worth of influencer marketing. There is a way to do influencer marketing well, i.e., when influencers promote brands they believe in.

But sometimes it becomes clear that money is the only motivator for an influencer’s posts (as in the case of Scott Distick). Even when followers merely perceive this is the case, influencer marketing as whole suffers.

Regulations are necessary, but it is not in the power of the FTC to enforce them consistently. That is why it is in the industry’s interest to self-regulate.

Effective Disclosure Needed

The “microphone” that influencers have allows them to draw attention to issues and brands they believe in. But with that power comes the ability to abuse it. When this abuse occurs, influencer marketing is worse off.

Now the marketing is almost done on the social network, the sellers are also aware of the most reaching social network and the buyers are also aware of that. This article told us how to do the marketing with the help of social network, thanx for sharing this.

Nowadays people are most of using social platforms and they are using the social media for marketing and influence marketing is very popular on social media. This article is very beneficial for business.

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Very interesting! I understand about companies wanting to reach these demographics, but it must be like trying to throw a dart at a moving ant…..you never quite know if you’re going to hit your target!

Add in the fact of the increasing regulations (which are, in general, fair) and will it be worth a company’s time and $$? It just seems so hard to determine what the results are for this type of marketing expenditure.

Influence Marketing is a powerful tool nowadays. Yes, you enjoy the power of being an influence but there are criticism and negativity that move alongside.Rahul Bedi would love you to read ..Bigg Boss 11 Theme

influencer marketing is nowadays very popular on social media.
There are number of people who are already doing influencer marketing in various unique ways.prasad would love you to read ..Manual For Exams

Most of the marketing strategies is now influenced through social media which is inclusive of Istagram, facebook, twitter etc. This works well if the business is more on e- commerce as one can advertise the products and services via the social media. However, it can be hazardous people may have platform to criticize some of your products if didn’t work for them hence evading some clients from purchasing the product or services. So be careful find out what can really influence your market monitor the social medial frequently.

Hi Carolyne. Yes, it’s true that people can criticize, as well as praise, your products on social media. But if companies know what they’re doing, these can be opportunities for brands to resolve customers issues well in a very public way.Jessica Mouser would love you to read ..Why Influencer Marketing Is Both Powerful and Hazardous

I totally agree with everything you’ve said Jessica. One line that stood out to me though, was that people that have a powerful influencing ability subsequently have the potential to abuse it too. This definitely adds a degree of responsibility to these figures. Something else that I’d like to add, is that with influencing power, the audience typically increases their expectation of you and your actions. This at times can be a very bad thing — whether you’re a large brand or a single influencer, and especially so when the media gets involved.

Let’s take the 2015 Martin Shkreli incident for example. What he did by jacking up the price of a life-saving drug to over 5000% was simply horrible, and was met with the appropriate response. The public was incensed, they were outraged that the man would do such a selfish horrible thing, that could damage the lives of thousands, if not millions of families. Martin Shkreli was by all rights an influencer, a person in a position to change lives for the better. Though some big pharma companies do not always get the best rep, at the end of the day the public still has an expectation for them — a standard that they see fit. A trust that when given the choice between right and wrong that they will hopefully do the right thing.. And even though Shkreli had everything and more to make a positive impact with the drug, he did not do that and as such, he and his company suffered the consequences.

So I reckon that influencers and corporations definitely need to be more aware of the choices they make, and that as you grow larger and larger, the importance of even the most trivial seeming decisions become ever so important, and could make a huge difference in how your brand’s public image is shaped in the long term.

Hi George. That’s certainly a good point for people to keep in mind, especially because there is so much trivial information on social media. It could be easy to make excuses for our actions, but we never know how our decisions might be impacting others.Jessica Mouser would love you to read ..Why Influencer Marketing Is Both Powerful and Hazardous

While I understand the argument that even movies have placement, the difference with celebrities is that people look up to these people. And posting on instagram and other social media channels make it look real (as if the celebrities personally use a product).

Maybe this is one of the factors that Facebook page reach is now lower and Google shows more Ads in its search results (as this celebrity endorsement is an alternative to paying Google or Facebook).Sumit would love you to read ..Best Ergonomic Mouse to Use in 2017

Hi Sumit. Yes, that’s a fair point. Many people realize that social media is presenting an idealized reality, but it’s still easy for us to be taken in or distracted by what we see there. And I suppose it’s always dangerous to assume we know what people are thinking about what they’re viewing.Jessica Mouser would love you to read ..Why Influencer Marketing Is Both Powerful and Hazardous

I just want to chime in and thank you for your insights. If Google believes brands are using spend that they could get on influencer marketing instead, we can expect them to eventually go after influencer marketing users.

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